It is hardly surprising that research is showing that hospitality had the worst festive period in living memory – in fact, 2020 was the worst year ever. (I’m not sure we need research to work that one out!) But as we take stock on last year’s shutdown and the on going one – what is next?
Firstly, the trade organisations are working tirelessly on behalf of the licensed trade – all of the bodies from the Scottish Beer and Pub Association to the Scottish Hospitality Group, UKHospitality and the Scottish Tourism Alliance and SLTA are putting the case to everyone who will listen.
Rates is probably the biggest worry at the moment because if action is not taken by the Scottish Government to extend the Business Rates Holiday for the hospitality industry for another year, businesses across the country will be faced with paying rates based on 2016 figures. This would be enough to tip even the most successful operators over the edge. This needs to be addressed urgently if businesses and jobs are to be saved.
The other issue that operators are coming up against is Bank Covenants – or the potential breaking of them. Banks are requesting business plans to assess risk – but what operator can at this moment in time predict their level of business over the next 12 – 24 months? There should be moratorium on bank covenants for the next 12 months at the very least.
The continuation of the 5% VAT reduction for hospitality would also help. But the VAT reduction without the issue of rates being addressed is immaterial – because for many, many businesses, if rates are not addressed, they won’t be charging VAT because they won’t be in business.
Funding is still not coming fast enough and there will be a reckoning – I understand there are various Freedom of Information requests in to find out what has been paid out. Our First Minister tells us frequently that it has been allocated – I would prefer the term dispersed.
But some councils are certainly not going as fast as others when it comes to giving out the grants. Here’s hoping the vaccine roll-out is smoother than the Scottish grant roll-out.
What seems certain is that the current restrictions and ongoing restrictions are going to last well into the latter half of the year. Will we come out of the tier system this year? No doubt the organisers of the Climate Summit are hoping we will because if we don’t, it will not be going ahead!
Just to remind you
Tier 0 – Hospitality open and licensing times adhered to. Weddings and funerals limited to 50, eight people from three households can socialise inside and 15 from five households can meet outdoors.
Level 1 – Hospitality – Inside last entry 9.30pm closed 10.30pm. The rule of 6 applies, with weddings and funerals limited to 20. Same times for outside.
Level 2 – households can mix in hospitality but not at home. Inside, alcohol only can be served with a main meal. 7pm last entry. Outside, alcohol allowed – 9.30pm last entry, 10.30pm close.
Level 3 – no alcohol inside, 5pm last entry, 6pm closed. Outside, no alcohol.
Level 4 is the closure of all hospitality venues.
There is not likely to be a quick loosening of the tiers, despite the vaccine roll-out. Most people suggest that we may move out of lockdown mid-February if we are lucky. Then into Tier 4 in March – and perhaps by the end of March we may move into Tier 3… if we get lucky then maybe Tier 2 for Easter. But the jury is out on that. It all depends on the figures.
It has been suggested that the UK Government will move quicker. The Scottish Government is always more cautious.
However, the devil is in the detail. Tier 3 with the restrictions on opening hours makes opening not viable for most businesses in this tier. Some businesses can operate without alcohol but it makes no sense financially if they can’t do evening meals.
There has to be some flexibility from ScotGov to help hospitality get back on its feet. If that is trading hours, then it’s something.
But there are other issues not least for suppliers. The Scottish Government is pushing ahead with the Deposit Return Scheme – and wholesalers are having to bear the set-up costs of this scheme which is being imposed on them. We all know that wholesalers are not working on the biggest margins – and every trade business needs wholesalers to keep operating in order to have the supply there when it is needed. So right now, despite its green credentials, it really is not good news. It is due to come into play on 1st of July this year. Perhaps it is time that DRS was put back 12 months.
Remember, licensees will seen an impact cashflow too, with a deposit on all cans and bottles (single use drinks containers) of 20p required before you sell them – yes, you get the cash back, but when?
The only help suppliers have had is a £5m fund launched in December – which was open for only a week. It was targeted a food and drink wholesalers who had seen sales fall by 20% or more since March – most of the hospitality suppliers I know lost upwards of 90%… despite pivoting to sell to consumers.
Soho House has always been a trendsetter and now its owners have become one of the first adopters of A Plastic Planet’s Commitment Mark ‘Working Towards Plasticb Free’. Our early adopters include people like Anna Christopherson of Boda, who we mention in our influencers column, and the likes of the Glenuig Inn – Scotland’s Exemplar Green Inn. But every day I hear about another pub or hotel that is adopting greener and more environmentally friendly practices. I think we all need to do our part. But I do think there has to be a re-think of the Returnable Deposit Scheme. More on that next month.
New research has shown that alcohol brands need to rethink how they market to men: many old-fashioned, dated and perhaps toxic views of masculinity are still prevalent among British males, thanks in part to the stereotypes seen in advertising. I don’t think we needed to do any research to work that one out! But the research by New Macho, the specialist men’s marketing arm of the brand and cultural transformation company BBD Perfect Storm, also reveals that nearly half of UK men (46%) feel that Guinness doesn’t reflect them at all while 47% feel the same about Heineken and 48% about Johnnie Walker. (54%) feel that Gordon’s Gin doesn’t reflect them. 49% say as much about Diet Coke and 54% think that way about Bacardi. New Macho believes that some of these brands are not helping men cope with mental health issues, saying, “The ad industry has to accept some of the blame for this, as many food and drink brands are still portraying men either as aloof and hyper-competitive or as dorks and figures of fun. It’s all just gender stereotyping, which the Advertising Standards Authority is rightly working to eradicate.” A marketing re-think should be on the cards.
My father has been here and he was touring Scotland with his partner and ended up in Edinburgh. He had been to Skye, Dundee and Loch Ness – not bad for someone in their 80th year. But in Edinburgh, he was staying at The Balmoral and he, unfortunately, tripped while flagging down a taxi and fell. I’d like to say a huge thank you to the staff there who helped him out considerably. The good news is he only dislocated two fingers and didn’t break them, and honestly, there was absolutely no alcohol involved.
However, I did have a wee toast to Harry Hood the other night. He has been a great friend of the DRAM and of mine and I was so sorry when I was told of his passing. His obituary is on page 25. The trade will certainly be a duller place without Harry in it. But I have a feeling he will be sitting on my shoulder saying “Susan, what about the rates issue?”
I was also shocked to hear about the death of John McQue of The Tartan Arms in Bannockburn, just as we went to press. He is another trade friend. A terrific guy whose enthusiasm knew no bounds. I recall bumping into him in Broughty Ferry when he had his regulars on the annual away visit to another town for a quiz! What a laugh we had. His obituary will be in the next issue.
Our new guide to Scotland’s Top Whisky Bars is now out, and I love it. I don’t often say that, but I do like this publication. We can’t fit every great whisky bar in Scotland in, but we do highlight more than 50 bars to visit. My friends also like it.
I’m off to Islay at the weekend with a gang of whisky enthusiasts and Distell to experience the Feis Isle Festival. I can’t wait.
I am looking forward to getting out and about judging for this year’s awards… it’s only 10 weeks away and we already have 1,500 entries. The deadline for putting someone forward is the 14th June – so get voting. www.scottishbarandpubawards.com
JD Wetherspoon can’t win. When the group was opening in local towns across the land there was negative publicity galore. The fear was that they would put smaller pubs out of business. And now that they are consolidating and selling some pubs on, they are getting criticised for making a business decision to close them. The Vulcan in Coatbridge, The Cross Keys in Peebles and the Alexander Bain in Wick are amongst the pubs the pubco is moving on.
Arbikie Distillery has announced that it will be donating £1 per bottle for all on-going sales of their AK’s Gin to Motor Neurone Disease, in perpetuity. The business, now owned by the Stirling brothers, took the decision following the death of their father, Kirkwood Stirling, who recently passed away after suffering from MND for a number of years. The family wanted to celebrate his life and provide an on-going legacy by announcing this charitable donation in April-when he would have been celebrating his 84th birthday. Alex Stirling farmed at Lunan Bay for over 60 years and built a sizeable mixed arable farming enterprise that provided an ideal base for the development of one of the world’s few field-to-bottle distilleries.
Son, Iain Stirling says, “It just seemed an appropriate way to keep dad’s memory alive and to give something back”. It certainly is. Recent data from the Altus Group has revealed that almost 1,000 UK pubs closed in 2018 – a rate of 76 pubs a month. The good news is that this is down from138 closures a month during the previous seven years.
Brigid Simmonds, Chief Executive of the British Beer & Pub Association, comments, “Too many pubs are still closing because of huge tax pressures and went on to reveal that pubs pay on average £140,000 in tax each year and the BBPA are continuing to ask for more help on business rates.”
They are not the only ones. A new Scottish trade initiative called ‘Fair Rates for All’, has launched. Its aim is to come up with a solution to the methodology that Assessors are currently using, which is no longer ‘fit for purpose’. It needs everyone’s support and the trade bodies are backing it. Why not do the maths yourselves – take your current assessment and work out what the damage would be if it calculated on net profit, or on Square metres or last, but not least, nonrevenue-earning square metres?
I went to Portpatrick for Easter weekend and couldn’t believe how busy it was. The pubs were absolutely packed with people from Ireland and the North East of England. The service was great and the atmosphere was spot on. Kids, and dogs, teenagers and grandparents – all ages, and lots of the four-legged variety too, all of which were well catered for in the town’s pubs. I’m hoping it was as busy in the rest of the country.
This month also saw me head to Crinan to catch up with Frances Ryan, the lady behind The Crinan Hotel, and what a character. She has been at the hotel for the last 50 years and running it on her own for the last five after her husband took ill. He passed away last year. The stories that she told were great fun and I wish I had met her husband Nick – he sounds like an amazing character. Frances is also an acclaimed artist, painting under the name Frances MacDonald, while her son Ross is also a well-known artist. Meanwhile, her daughter is a former model, who works with her husband running a Madagascar charity. She is also a singer and coaches children, and in her spare time she runs a B&B! What a talented and hard working family!
The interview is in the Hotel Scotland magazine. You can see it online at hotelmagazinescotland.co.uk.
Things are definitely heating up on the awards front – and be sure to put your posters up – we’ve already had more than a 1,000 people put their favourite pubs forward. So don’t be shy be sure and get your team and your customers to vote.
Research from Rotary Great Britain claims that more than half of all UK adults are lonely, particularly when they get home from work. Perhaps the trade needs a new marketing campaign – Get local, not lonely! Rotary has suggested that people seek out new groups or volunteering opportunities as a way to meet new people and have the opportunity to socialise within their local community. Nothing beats a good local, which caters for and attracts the local community. But the at the end of the day it needs to be good, even if it is local – with great food, good service and a good offering. I am hoping to get one where I live soon!
Having been involved in this industry for the last 25 years (seems like yesterday), I have met lots of people, some of whom have moved on to different roles and different parts of the country. One such man is Stephen Crawley, former MD of the Caledonian Brewery. A press release popped into my inbox the other day revealing that Love Lane beers took home a Gold and a Bronze in the at the SIBA National Independent Beer Awards, and its founder and Chief Executive, is Stephen. We once did a Caledonian Calendar with lots of naked rugby guys – a career highlight! Anyways, congrats Stephen. I get a lot from various drinks companies on their diversity programmes and, certainly, they do give themselves a pat on the back for being inclusive and having a diverse culture. However, I think some HR departments forget that this also applies to ageism and I certainly think that issue is going to rear its head, sooner rather than later.
It’s very brave of Johnnie Walker that the team behind the brand has come out and said they’re going to create the ‘Best Bar in the World’ in Edinburgh. Greg Klingaman, global reserve retail director at Diageo, said they were not “shy about their aspirations.” He also said that their visitor attraction would be the “best brand attraction in the world”. So Edinburgh watch out. He obviously doesn’t live by the adage – “Under promise and over deliver!’ Greg can definitely ‘talk the talk.’ Here’s hoping in that Johnnie Walker tradition the bar will ‘walk the walk.’
The Kingshouse Hotel, Glencoe
I have been to a couple of places recently which I have been very pleasantly surprised by. First up was the Kingshouse in Glencoe. Despite my initial reservations regarding the look of the building, it certainly delivers on quality, and the architects and designers have done that rare thing – combine modernity and functionality with a warm and inviting building. They didn’t create the view down the Great Glen but they have made the very most of it. Fabulous.
It was great to catch up with Jonathan Gillbanks – you may know him from his Whyte & Mackay days as Commercial Director, but he has now joined the hospitality industry full-time having bought the Cairn Lodge in Auchterarder. It has just re-opened and what a tremendous refurbishment it has had. It’s definitely a five-star establishment and the job that Jonathan and his team have done is tremendous. And in a nod to his former career, he has bronze stags, reminiscent of the Dalmore stag, on his bar. Definitely worth a visit. There have been quite a few meetings with licensees and hospitality industry professionals with regard to the rates issue. If anyone else would like to get involved, let me know. You can email me at susan@mediaworldltd.com
